Google parent Alphabet on Wednesday reported blockbuster earnings, with revenue surging as the company pours billions into cloud computing and artificial intelligence.
The tech giant said revenue rose 18 percent year-on-year in the quarter, pushing annual sales past $400 billion for the first time since the company was founded in 1998 by Larry Page and Sergey Brin.
Alphabet also signalled an escalation in the technology arms race gripping Silicon Valley, announcing plans to nearly double capital spending this year. The company expects capital expenditures of between $175 billion and $185 billion in 2026, roughly twice its 2025 outlay to meet surging demand for AI-powered products.
Despite the aggressive investment push, Alphabet chief executive Sundar Pichai said demand continues to outstrip supply.
“We’ve been supply constrained even as we’ve been ramping up our capacity,” Pichai told analysts on an earnings call.
Alphabet shares slipped just over one percent in after-hours trading.
Gemini wins fans
Google’s Gemini artificial intelligence platform continued its rapid ascent, ending the year with 750 million monthly users, an increase of 100 million from the previous quarter.
“We expect Google to overtake OpenAI this year for the top spot in AI,” said Emarketer analyst Nate Elliott.
Alphabet generated $113.8 billion in revenue in the final three months of 2025, driven by strength in its core search business and cloud services. Net profit for the quarter rose to $34.5 billion.
Cloud revenue jumped 48 percent to $17.7 billion, underscoring the division’s growing importance as Alphabet competes with Amazon Web Services and Microsoft Azure.
“We’re seeing our AI investments and infrastructure drive revenue and growth across the board,” Pichai said.
Search and advertising remained Alphabet’s biggest money-maker, bringing in $82.3 billion, up from $72.5 billion a year earlier. YouTube advertising revenue also climbed to $11.4 billion from $10.5 billion.
The steady flow of advertising cash continues to give Alphabet a financial edge as it ramps up investment in AI infrastructure. The company said it now has more than 325 million paid subscriptions across consumer services, including Google One and YouTube Premium.
Keeping Chrome
Alphabet also continues to benefit from a US court ruling late last year that spared the company from having to sell off its Chrome browser to address monopoly concerns. Google has since notified the court that it will appeal a separate ruling finding it held an illegal monopoly in online search.
Despite the strong overall performance, Alphabet’s experimental “Other Bets” division, which includes self-driving car unit Waymo posted a loss of $3.6 billion on revenue of just $370 million.
Waymo said this week that it raised $16 billion in a funding round valuing the unit at $126 billion, with Alphabet as the majority investor.
Co-chief executives Tekedra Mawakana and Dmitri Dolgov said the funding marked a turning point for autonomous mobility.
“This infusion of capital will ensure we are positioned to move forward with unprecedented velocity, while maintaining our industry-leading safety standards,” they said in a blog post.
Waymo last year more than tripled its annual ride volume to 15 million trips and now delivers more than 400,000 rides per week across six major US metropolitan areas.
AFP
